Consumer will be the king say dairy companies after GST rollout

Producers of pickles, jam, tomato ketchup complained that GST had raised the taxation level and said sales had slumped after the onset of the new regimeMadhvi Sally | ET Bureau | July 03, 2017, 09:12 IST

Amul has reduced prices of cottage cheese, dairy whitener and baby food, increased the price of ghee and left cheese, butter and ice cream unchanged after the Goods and Services Tax regime kicked off on Saturday.

Producers of pickles, jam, tomato ketchup, however, complained that GST had raised the taxation level and said sales had slumped after the onset of the new regime, while sellers of branded rice and wheat flour said their distributors had issues with the new system. RS Sodhi, managing director, Amul said implementation of GST had been normal.

“We don’t expect any major change in revenue with implementation of GST. The consumer gets to gain. As there was substantial increase in tax for ghee we have increased prices by Rs 25-30 a kg. Cheese, butter and ice cream prices have not been changed as increase was marginal. However, we reduced prices of milk products which came under a lower slab by 5% like dairy whitener, paneer, baby food and cream.”

Nitin Seth, MD at GD Foods, the maker of Tops brand of food products, said there was a slump in demand on the first day with modern retail stores -Kendriya Bhandar, Easy Day and others not doing the billing as systems were being updated for GST, and they were only selling essential commodities with manual billing. "Everyone is trying to understand how things will work. We have not increased retail prices yet.”

Rakesh Jain of Rajdhani Group said they have increased wheat flour (atta) prices by 5%. “Implementation is a challenge as 90% of bulk packing of 50 kg is being sold unbranded. No one (distributor or retailer) is buying as of now. The other challenge is that retailers have not registered for GST," he said.

Priyanka Mittal, director at KRBL, which owns India Gate basmati said the company was GST ready. “The shocker is distributors have not placed orders as they expect GST on branded basmati to be reversed from 5% to zero.”